The Connecticut Insurance Department (CID) has placed HealthyCT, a consumer oriented and operated plan (CO-OP), under an order of supervision, preventing the company from writing new or renewing existing businesses in the state.
According to Katherine Wade, insurance commissioner for the CID, the CO-OP was struggling financially and was becoming “hazardous” to its existing policyholders.
Wade said: “As regulators, consumer protection is our prime mission and an essential part of that is ensuring that carriers can honour their promises to their policyholders.
“Unfortunately HealthyCT’s financial health is unstable, having been seriously jeopardized by a federal requirement issued June 30, 2016 that it pays $13.4m to the US department of health and human services, Centers for Medicare and Medicaid Services as part of the Affordable Care Act’s risk adjustment program.”
Wade went on to say that the financial state of HealthyCT was evidently due to the risk adjustment mandate.
Since the establishment of HealthyCT, the CID has met every month with the company to monitor its financial solvency, its business plan and operations.
While the CO-OP is supervised, all of its policyholders will be fully covered until December 31 2016 and all claims incurred throughout the calendar year will be paid under the terms of the policy.
They have been urged to enroll for the 2017 plan year from the November 1 to December 31 2016, or renew elsewhere.
However, CO-OP group plans that have been renewed on July 1 2016 will still have coverage through to June 30 2017 with HealthyCT.
Group plans that come up for renewal on August 1 2016 and beyond are expected to move to a new carrier at renewal.
The CID will work closely with HealthyCT, the state exchange Access Health CT, the broker community and other carriers to help large and small employers find new coverage when it is time for them to renew their plan each year.
HealthyCT is a non-profit health insurer based in Connecticut with the purpose to participate in the Connecticut health care market as a CO-OP.
Wade personally met up with Sylvia Burwell, secretary of health and human services (HHS) earlier this year to encourage change to the risk adjustment formula.
Kenneth Lalime, chief executive officer (CEO) of HealthyCT, added: “We are grateful for the strong stewardship of the CID whose professional staff have helped guide us through the entire process from our formation. I want to assure our policyholders that they are covered through the end of their policy periods.”
HealthyCT, Insurance, Risk management, Connecticut Insurance Department, US